Interest rate and APR are related, but they answer different questions. Entering APR in a payment calculator can give you the wrong payment estimate.
Interest rate helps calculate the loan payment
The interest rate is the rate applied to the loan balance. Our fixed-rate calculator uses the balance, interest rate and repayment term to estimate principal and interest.
In a field labeled interest rate, enter the percentage number from the loan terms. For a hypothetical 6% interest rate, enter 6. Entering 0.6 means six-tenths of one percent, which is a very different assumption.
APR includes more borrowing costs
The annual percentage rate includes the interest rate and certain additional loan costs expressed as an annual rate. The CFPB explains that APR can include points, broker fees and other charges. See its interest-rate and APR explanation.
APR is useful context for comparing offers, but it does not replace a review of the fees, loan term and how long you expect to keep the loan.
Why using both APR and fees can confuse the estimate
Our calculator asks for the interest rate and fees separately. It calculates loan payments from the interest rate, adds financed fees to the new balance, and includes separately paid fees in the cost comparison.
If you substitute APR for the interest rate and also enter fees, you change the payment calculation while still counting those fees elsewhere. Use the interest rate in the rate field and the actual estimated fees in the fee fields.
Compare offers on matching terms
A useful comparison keeps the loan amount, term and loan type consistent. Also check points, credits, financed fees and rate-lock details. An adjustable-rate offer needs a different analysis because the future rate and payment can change; this calculator supports fixed-rate, fully amortizing loans.
If the numbers in an informal quote are unclear, ask for a written breakdown identifying the interest rate, APR, payment, points, credits and fees. The Loan Estimate explainer shows where to look on the official form.
A rate you try is not a rate you can necessarily get
The calculator’s new-rate field lets you explore an assumption. It does not check availability, your credit, property details or eligibility. A national benchmark or headline also does not establish your personal rate.
Try a fixed-rate scenario using clearly labeled assumptions. Review a lender’s actual terms before making a borrowing decision.